Eliminating DRM Is the Greatest Competitive Hammer Against Amazon

One thing that I’ve heard repeatedly from any publisher is that Amazon is a bad business partner. It doesn’t matter if the publisher is an agency pricing publisher or a low priced digital only publisher. Amazon treats everyone poorly. Amazon needs competition. Amazon has no motivation to keep prices low, innovate their retail site, improve their reading software and devices, and provide high margins to writers if there is no competition. Currently Amazon acts as if there is no competition. Apple and the publishers who are involved in the DOJ lawsuit maintain that Amazon’s monopoly hurts the publishing culture and by extension readers. The problem, however, isn’t that Amazon has a monopoly (which at 60% of the trade ebook market it is not a monopoly) but that the publishers are using price as the only competitive tool.

Publishers haven’t helped to develop a robust independent retailer market for ebooks. I wrote a few weeks ago about the lack of competition that was fostered during the two years of publishers and Apple setting the price for ebooks. The sad truth is that while Barnes & Noble has gained market share, independent booksellers have not.

When Google pulled its affiliate program, most every independent bookseller has been left without a digital option. Google’s relationship with those booksellers will end on January 31, 2013. Currently the independent booksellers are awaiting the American Bookseller’s Association for a solution. Two booksellers have attempted to explain the current state of independent ebook bookselling. Ruth Curry of Emily Book writes

Publishers told us that if we did not have digital rights management (DRM) technology, they weren’t interested in letting us promote and sell their products. DRM is the set of technologies that encrypt and prevent the reproduction of e-book files. A new bricks and mortar bookstore, even the tiniest one, could have easily opened accounts with all the major distributors. But to sell electronic versions of those exact same books, publishers told us that you have to be a mega corporation. We were confused, and set about finding out why this counterintuitive business practice has taken root.

DRM is supposed to prevent piracy and illegal file sharing. In order to provide DRM, you need at least $10,000 up front to cover software, server, and administration fees, plus ongoing expenses associated with the software. In other words, much bigger operating expenses than a small business can afford. By requiring retailers to encrypt e-books with DRM, big publishers are essentially banning indie retailers from the online marketplace.

Lori James of All Romance eBooks wrote:

There was much talk originally about how Agency would level the playing field for the little guy who couldn’t hope to engage in the kind of loss leader pricing Amazon was doing. Instead, we could compete based on “service”. Yeah! We’re great at service. It sounded good. Then the content was pulled. It was many months before contracts were even available for initial review. Meanwhile – it’s back on Amazon and B&N. It’s on Apple. Getting Agency back was a priority but it took over a year to get those titles back due to numerous delays. And, this also required significant IT build-outs.

KoboBooks pointed out that under this new Apple pricing scheme by publishers, loyalty programs, coupons and the like are not allowed:

We lose most of our ability to issue coupons, promotions, special discounts, kickbacks, buy-X-get-one-free. We could still do it for non-agency titles, but then we end up in a weird situation of “Get $1 off, but only on these books, and definitely not on these other ones.” That’s not fun. And worse, it’s confusing to consumers. We’re sad about that, obviously. Not just because they’re a great way for us to drive sales, but because they help us focus attention on specific great books, reward our loyal customers, and celebrate the launch of new features, apps or services.

There are three things that need to be accomplished:

A standard formatting for ebooks should be implemented. This is permitted explicitly by DOJ Settlement terms.

DRM should be removed. There is no way to sell books to the Kindle readers with DRM.

Publishers should start sourcing books for independent booksellers.

Let me make the case for no DRM. I have heard that because I advocate against DRM, I am pro piracy. I am not pro piracy. However, I know that there is no way to effectively compete against Amazon unless there is some way to deliver books to Kindle readers. The only way to do this is to remove DRM.

DRM does not prevent piracy. I heard this claim during the week at Romantic Times being proclaimed by some authors. I’m uncertain where this myth started, but it is a myth. From the inception of ebooks, DRM has existed and so has piracy. Even before ebooks were prominent, piracy existed. Piracy will exist tomorrow if DRM was eliminated.

DRM only hurts legitimate purchasers of books by preventing readers from moving from one platform to another (like from a Kindle to a nook). Major players in the publishing industry recognize this:

In a speech this afternoon at the Digital Book World Conference in New York, Berlucchi [CEO of London-based social e-retailer Anobii] argued that digital rights management technology, or DRM as it is known, prevents more readers from buying e-books and may actually encourage piracy of copyrighted material.

“There’s a misconception that somehow the digital format of books has made piracy increase, or become logarithmically more serious. But piracy was always very easy to do, because scanning a physical copy of a book [takes] a matter of minutes. A physical book doesn’t have DRM on it.

“Coming from the audio business, where I started, we had DRM on our audiobooks when music had DRM on it, and as that changed, a lot of audio publishers started to drop the DRM on their audiobooks. We were one of the last ones to drop it, and I was asked to monitor the destruction of my business. The business was not destroyed. If anything, it became more robust.

“You could argue that taking the DRM off e-books would be in the benefit of consumers, and possibly even publishers, because then you wouldn’t have the device lock-in you have now.

About the only thing that DRM does in terms of preventing piracy is that it may reduce the casual sharing of digital books between acquaintances. One way to eliminate that worry is to institute social DRM. Social DRM is what JK Rowling is doing with Pottermore. A special code is inserted into a book that is tied to a person’s account. If that book is shared, the book can be tracked back to the original purchaser. Another way to institute social DRM is to incorporate small invisible html changes or, as Amazon once proposed, to change a word here and there within the text of the story. The goal is to be able to track an uploaded file to the original purchaser. This can serve to reduce the amount of casual sharing of digital books that worry some publishers, authors and agents.

If publishers are serious about competing with Amazon, price is not their only or their best tool. Getting rid of DRM is. With DRM eliminated, competing retailers can finally serve Kindle customers. With DRM in place, Amazon will maintain a hold on its place in the industry and if price wars are ahead, then it may only strengthen its position.

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Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She self publishes NA and contemporaries (and publishes with Berkley and Montlake) and spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty.
You can reach Jane by email at jane @ dearauthor dot com

Comments

The Kindle has a market share of somewhere between 50% and 70%, depending on what you call the market. All those Kindle users have little reason to buy a competing e-reader. In short, Amazon has sewn up a huge share of the market for the next few years. So, the only way publishers can foster competition for Amazon is to find a way for Kindle-owners to buy from someone else.

I also think publishers worry about piracy too much. Piracy can be measured, casual sharing of print books can’t. I share most print books with friends or family, if I think they are worth sharing. If not, they go right to the book swap. This can’t be measured and it’s legal, so publishers aren’t out there, counting how many sales they’ve lost. They assume it is zero.

As an independent publisher with a long background in traditional publishing, I find Amazon to be a terrific business partner. It provides accurate sales numbers and payments at a speed that traditional publishing doesn’t come close to matching. It makes the process of distribution incredibly easy and its responsive to change requests can’t be beat.

And the idea that publishers could ever complain with a straight face that Amazon has “no motivation to keep prices low, innovate their retail site, improve their reading software and devices, and provide high margins to writers if there is no competition” is insanely funny. Publishers have had decades to come up with the motivation to do those things and mostly have just considered them too hard, too costly, too disruptive. If the traditional publishers had their way, publishing would still be in the 1950s. And realistically, if Amazon stops doing those things, so what? So Amazon has no motivation to keep prices low — publishers have never had that motivation and have never done it! So they don’t keep innovating on their retail site or their ereader — are bookstores and books so different than they were decades ago? Is there something wrong with what they have now that it needs continual improvement? As for the margins to writers — sure. Amazon could stop providing writers with 70% royalties at any time and instead provide the royalties that traditional publishers do. How exactly does that make them worse than traditional publishers?

Amazon views publishers as middlemen and wants to cut them out of the sales process, selling directly from writer to reader. Yes, publishers aren’t going to like that. But before you buy into their Amazon-bashing and repeat it as if it makes sense, it’s worth looking at with a critical eye and considering their motivations. Amazon does not treat everyone poorly. Amazon treats authors beautifully. (When I worked in traditional publishing, it was as an acquisitions editor: I assure you that Amazon treats me as an author better than I was ever able to treat any of the authors that I acquired books from. The sales figures alone are just amazing.)

I can get books sent direct from AllRomance ebooks to my kindle by crossreferencing the website and kindle email addresses (actually I just followed the instructions in a post on their website). But this won’t work for secure formats. Is that what you mean by DRM? I gather that there are many books from the big publishers that are only in secure formats?

Before it gets too crowded I’ll sit here at the back of the bus and say I like Amazon, very much. Amazon knows who their customer is.

No one forced Amazon to sell loss leaders. That initiative brought the house down in more ways then one and, although I feel for smaller ebook sellers, the adjusting to competition and new technology is part and parcel of being in the ebook business.

Using DRM to combat piracy is like using a fly swatter to stop a canon ball. Get rid of it.

Publishers should be worried about how Steve Jobs set them up to make his i-stuff king of the hill. If they thought for one moment that his goal was to help them with their profit margin the they are more out of touch than even I thought.

Maybe if publishers concern themselves with digital content formatting instead of tracking the loan of ebooks (and stop playing at being Big Brother because they aren’t qualified for the job) they might see a rise in sales.

Publishers would be WELL SERVED to concern themselves with negotiating international rights instead of arbitrarily raising the price of books and blathering on about piracy.

Getting rid of DRM is a great & necessary start but publishers need to look at their selling and distribution methods to get them out of the sinkhole they’re in now. YMMV.

When Amazon first started selling mp3s they made them DMR free. I immediately stopped buying music from Apple and now buy all the tunes from Amazon. DMR is not a barrier to piracy in the music business–I have four teens, I know. I’m with you, Jane. It needs to go.

Apple and the publishers who are involved in the DOJ lawsuit maintain that Amazon’s monopoly hurts the publishing culture and by extension readers.

I find it rather odd that the pubs & Apple insist that AMZ has some “monopoly” (and I agree that 60% MS is nowhere NEAR what anyone can call monopoly), and that AMZ hurts the publishing culture. (Or rich literary culture if you want to borrow the AG terminology)

What is this publishing culture? Offering writers the ever-generous 8% royalty rate? Printing lots of copies, knowing that 50+% of them will be returned, unsold? Paying writers twice a year? Selling books with typos and other editing errors and/or really bad formatting errors? They never define what it is. They just insist that they must exist (profitably, too) to protect this “publishing culture” from AMZ.

Amazon has no motivation to keep prices low, innovate their retail site, improve their reading software and devices, and provide high margins to writers if there is no competition.

Instead of insisting that Amazon has no motivation to provide high margins or innovate, why don’t publishers innovate the way they do business, offer better royalties and terms to writers and improve reading experience (as in better editing and formatting, etc.)? Prove to their readers why “publishing culture” should remain as-is. Show why they matter, what value they bring to the table.

Well said Jane. If only the publishers would only listen to what you and others keep saying. The only entity that DRM benefits is Amazon. It does not stop piracy – never has. Anyone who wants to engage in piracy will figure his/her/its way around DRM. As you noted, the best way to reduce piracy is through a form of social DRM or identifying markers. Sure, people will then be able to share books among their friends, but we’ve been doing that for centuries with paper books – it is probably the best form of marketing an author and publisher has (I lend a loved book to a friend and she tells two friends and so on and so on – the next thing you know they’re fans as well and buying up everything the author has ever written or will write).

I think that the underlying problem still remains that publishers don’t see readers as their customers and until they do they will continue to flounder from stupid idea to stupid idea.

Totally. I have been trying to say this for ages. Because Amazon sells the Kindle, it’s in their interests to sell Kindle-formatted ebooks. At the moment, they are basically the only place doing this and even if you buy ebooks elsewhere, you have to strip the DRM before you can convert them to Kindle-format. 99% of readers are never going to bother (including me most of the time, to be honest). I just don’t see why it’s taken publishers so long to work out that it is in their interest to separate ebook sales from ereader sales. Surely they want to sell books to people with all kinds of ereader, from whatever bookseller the reader prefers?

I find it rather odd that the pubs & Apple insist that AMZ has some “monopoly” (and I agree that 60% MS is nowhere NEAR what anyone can call monopoly),

Somewhere in all of these files/blog posts from the Author’s Guild + others, Amazon was cited to have had BEFORE the mandatory price hike 90% of the ebook market after they introduced the Kindle and those $9.99 price points. I’m pretty sure that they are referring to that period of time as being “monopolistic” and not now. After the prices were raised everywhere Amazon share dropped to 60% with B&N taking a 25% – whatever cut they have now. This has all been said before here and everywhere and publishers still don’t get it nor will they. They deserve whatever future they get.

I completely agree on DRM. If I were trying to compete with Amazon, the other thing I would do is order a reexamination of the 1-click patent in light of Bilski. I’m honestly surprised that nobody has done that yet. A monopoly on 1-click, particularly in the sales of digital books, gives Amazon a huge advantage. And reexams are cheap, legally speaking. Why hasn’t anyone done this?

I should be able to buy my ebooks from anyone I want to and read them on any device I own. It’s that simple. I’m like most people in the fact that I can’t afford one of each branded ereader out there. Fire? Nook Tablet? It doesn’t matter. One of each is a luxury the average person doesn’t have.

Yes, I have the Nook and Kindle apps on my phone, but my eyes are way too old to read on that for more than twenty minutes. So I bought a Nook Color because it was color and I could root it. When it was time, I sold the Color and bought the Nook Tablet because I’d been so happy with the Color, and though it has the latest OS, I knew if I waited, I could root that too.

I shouldn’t have to be forced to root my $200 device to read what I want to read. And I should be able to share a book I paid for, whether it’s in print or electronic format.

As a self-publishing author, I have no complaints whatsoever about Amazon. They pay me 10-20 times the rate my traditional publishers did, they pay it to me quickly and on time. They publish in days, not months or years.

As a reader, I have no complaints whatsoever with Amazon. I have their free Kindle for PC on my laptop. Books download in seconds or minutes at most and I have no difficulty reading. (If I had an actual Kindle, I would have it with me at my work desk and get nothing done, so I prefer to have the PC application.)

What I have a problem with is this absurd system that says B&N will have one set of software and one reader device, AMZ will have another, Kobo and Sony and all the rest will have another, and in order to sell books, an author has to find a way to get her book into all those formats. I suppose shifting to one universal format might put Smashwords out of business, but is the whole thing more about the middlemen than it is about writers and readers?

The other thing I don’t like is the idea that I don’t actually “own” the copy of the book I download. It’s not mine to do with as I wish. I can read it as many times as I want (and I guess with Amazon’s lending system I can share it with someone for a limited amount of time) but it’s not really mine the way a mmpb or hc is. I can’t give it away, can’t trade it in, can’t sell it at a yard sale. And I think that for those of us who grew up with the UBS as a source of reading material, this is a big deal. Not everyone can afford to shell out $7.99 or $9.99 for a book they may read once and then never again.

The publishers have hurt readers with all their shenanigating (thank you Courtney!) over piracy. Used book sales have been a fact of life for readers for years and years and years, and I consider this whole issue of DRM and “piracy” to be a means of keeping the less wealthy from having affordable access to books.

A lot of the self-publishing authors are keeping their prices down, many under the $2.99 floor at Amazon for the 70% royalty. We want people to try our books without fear that they’re buying an unknown and risking big bucks to do it. And frankly, a lot of those self-published books may not be worth even their 99-cent bargain price! But how many more books could the “publishers” be selling if they did away with all their fears and all their expensive technology and all their propaganda and just sold the damn books?

Why not put a code in the document that tracks duplicating? Why not allow transferring of files but not duplicating? Are they afraid I’m going to start a chain where 25 people read the one copy of the book I bought? Of course that’s not going to happen because it would take too long. People get impatient and buy their own if it only costs $2.99 instead of $9.99 (or more). Just as they’ve bought used books for years and years and years, no matter how upset about it Rebecca Brandywine got. (Hi, Rebecca, if you’re reading!)

If the publishers have the wherewithal to create the DRM software, they can create software to track “ownership” of individual copies. The file gets a serial number and can only be in use on one device at a time. It has to be deleted from that device before it can be transferred to another. This is EXACTLY what I did when I had my Microsoft software intalled on the allowable three computers and one of them had to be replaced. I deleted the software from the dead one, then legally installed it on the new one.

Apple and other manufacturers of electronic gear have the capability of tracking their equipment so that if the device is stolen and the manufacturer is alerted to the serial number of the device, it can be tracked. If someone steals your device, for instance, and then they try to get it fixed or (in some cases) even download to it, the manufacturer can immediately track it, sometimes recover it (if it’s at a service center or even a pawn shop), sometimes deactivate that device and make it unusable by the thief. (Insurance companies use this information to ferret out fraud in theft claims, too.) If the manufacturers have the technology to do this, they can track the files of the downloaded e-books, too.

The fact remains, as far as I can tell, e-books are much more profitable for the publishers because there’s nowhere near the manufacturing cost or capital investment in printing, e-books are much more easily restricted as to redistribution, and e-books are great vehicles for fear-mongering propaganda about monopolies and pirates and probably identity theft and threats to world peace.

When Simon and Schuster slaps a $25 price tag on a POD trade pb of a book that’s been OOP for 15 years and never sold more than 10,000 copies in mmpb, you know it’s not because they think they’re going to sell hundreds of thousands of copies. It’s because they know those electronic rights are the key to the downfall of publishing as we know it today. THEY KNOW where the power is and they’re going to hang onto it as long as they possibly can. It’s not to benefit the readers or the authors, and it’s not even to benefit the booksellers. ALL of those entities are considered expendable in the pursuit of profits to people who have no investment in the creating or the enjoying of e-books.

I would like to throw a couple of things out there. The first is that it is possible to read barnesandnoble books on a kindle fire, without the run around. Just download the app. Its not very complicated just google”how to DL nook to kindle fire.”. I could have other ereaders DL too but honestly I prefer amazon. I love their prices and their indie platform is better. If you look at the sale fugures for indies (many blog about their stats each month) amazon outsells b&b by. . FAR. Second, as far as I know DRM through Amazon is optional to the published. When I published it asked if I wanted DRM, and I had the option not to.

The one and only DRM’ed e-book I’ve paid for caused me so many problems, just trying to make it function, that I ended up learning how to strip the DRM off just so I could read the darn thing. Everything else I’ve bought has been DRM-free.

If publishers are going to continue with DRM, one thing I would love for all online e-book stores to do is clearly indicate which of their books have DRM. I know, for instance, that BN has many books with DRM and some books without, but there is no way, as far as I know, to tell which books are which. Since I want to still be able to do whatever I want with my books, even if I switch to another company’s reader, even if BN goes out of business, whatever, I don’t buy their e-books, because I don’t know which ones are DRM free. ARe makes it easy to tell which are which. Why can’t all online sellers do this?

I loathe the big publishers, I dislike B&N, I dislike Apple and all their shenanigans. I have only had good experiences with amazon so I can’t see them as the big bad bully boy their competition paints them as.

The big publishers are in the pickle they are in because of their unchecked greed and because they haven’t changed with the times quickly enough – and the changes they have implemented are hurting me as a consumer of books in the pocket book. So why should I have warm, cozy feelings towards them?

How many times have I gone on amazon lately to check out the newest e-book of authors I like and stare at the price in disbelief – and how it always says “price set by the publisher”.

But I refuse to buy e-books at these inflated prices so the big publishers are not getting my money. Luckily I have discovered new writers because of this, whose e-books sell at a reasonable price.

@JoanneL: I just finished reading Mark Coker’s “A Dark Day for the Future of Books” article over at CNN and was dismayed at his championing of the agency model and how it levels the playing field for retailers. I was so pissed off that I had to come over here and vent my ire. Thank you for saying it better than I could, Joanne.

@Darlynne: Coker’s position has noticeably shifted over the years from “Rah! Independence!” to the standard corporate line. Amazon, B&N, Apple, and Kobo all have author-direct options now, as do others with which Smashwords doesn’t have a distribution channel, such as ARE, and it’s reasonable to expect other retailers to cut out the middleman in the future. The kind of consolidated distribution Smashwords offers will be attractive only to authors who can’t be bothered to take care of their own formatting and multiple-account management. Authors with a less lackadaisical approach to their business (many of whom are probably also on the better-selling end of the spectrum consequent to their work ethic) will see the advantage of cutting out the middleman wherever possible, too. That affects Coker’s bottom line, so of course he’s jumping on the DOOM TO US ALL bandwagon.

And the idea that publishers could ever complain with a straight face that Amazon has “no motivation to keep prices low, innovate their retail site, improve their reading software and devices, and provide high margins to writers if there is no competition” is insanely funny.

I am not, and never have been, a fan of retail price maintenance aka agency pricing. I have repeatedly decried the glacial movement of the larger publishers to address the changing retail book market.

That said, 70% royalties for self pubbed authors did not come about until Nook entered the market. Amazon did not improve many of its Kindle features until Sony and Nook started innovating. Competition pushes innovation.

It is my belief and not those of any of the small time publishers I talked to at RT that Amazon has no incentive to innovate left alone in the marketplace. In fact, Amazon left alone in the marketplace will result in the very same stagnancy that many commenters are accusing the publishers of engaging in.

Competition is good for the consumer. For Amazon to remain good to the consumer, they have to have competition. This is true for any company in any industry.

I agree totally! I have a Kindle and before I learned to ‘liberate’ my books, I bought almost exclusively from Amazon. Now I can buy books just about anywhere (especially from Kobo ’cause they’re very generous with coupons ;-)) without worrying about having to purchase another eReader.

I buy all my HQN category books in e now because of space issues and because they’re cheaper. I strip the DRM to ensure my future access to them. If I lose the ability to strip DRM, I’ll stop buying e and space will by a problem again.

Please, just get rid of DRM already! I don’t want to have to choose between stripping an ebook myself and downloading some else’s efforts for an ebook I already own (which then isn’t piracy).

Due to the inherent limitations of ebooks, I don’t view the competition as “e vs. print” but “e vs. the library” since I don’t own an ebook just like I don’t own a library book. So, I refuse to pay as much for an ebook, hence no purchase whatsoever of Agency priced ebooks; I’d borrow the book or buy print (for which I could use coupons).

I suppose at some point in the future, I’ll rely solely on the library just to avoid all these shenanigans.

@Ridley: It was a similar comment of yours a while back that convinced me I needed to figure this out. I have been liberated, which for all the stupid, short-sighted publishers out there means: I can buy more of your *&^%ing books because I can put them on my Nook. What about this is so hard to understand?

Why not put a code in the document that tracks duplicating? Why not allow transferring of files but not duplicating? …. If the manufacturers have the technology to do this, they can track the files of the downloaded e-books, too.

All that would still require DRM. More relaxed DRM but still DRM. In order to do that kind of tracking, the file would have to be connected to some vendor’s server somewhere. Ebooks would be subject to the same problems of format obsolescence and server dependence as they are now.

Social DRM is different because it doesn’t tie files to anything. It just inscribes the owner’s “name” on the file like you’d write your name on something with sharpie. If a file were found on a pirate site, it would contain the original owner’s “name” so that person would be held responsible for the piracy. It’s DRM in the sense that it provides a way to designate ownership as opposed to DRM that lets the original vendor always have control of the file.

@MaryK: I see what you’re saying about vendor-controlled vs. social-media controlled DRM, and that makes sense, except that anyone could put anyone else’s name on a “file” and then when it gets pirated, the person whose name is on it may not be the person who pirated it.

But I’m thinking more along the lines maybe of a block of ID code more similar to the way URLs are assigned or ISBNs, or even tied to the device the file is downloaded to. The buyer has to give certain information to the supplier — CC or Paypal account, device address, etc., etc., etc., — so why not tie the ownership code to that?

The thing is, regardless what kind of technology it ends up being, I do believe this is the direction e-publishing is going to have to go in, meaning allowing readers to OWN their digital books, not just be licensed to use them in approved formats on restricted devices using proprietary software. That appears to be one of the sticking points for a lot of people who are resisting (even if for other reasons as well) the conversion from print to e. Certainly it is for me in the sense that I have a limited book-buying budget and I’m not at all willing to shuck out $7.99 for limited access to a digital file.

And as for Amazon’s monopoly of the “one-click” technology, why isn’t B&N or some other e-retailer devising their own version? I thought competition was the key to innovation. Well, folks, start innovating! ;-)

8%?!?! – the authors you know are doing better than the authors I know. My midlist friends are lucky to be getting 7%. Two of them have just done the indie thing on Amazon and are selling great – and making more than they could from HQN or equiv NY publishers.

I find this tracking of e-book reading even more offensive and awful than today’s boring flavor of DRM, and I would strip this the moment that I got a book with it.

In order for this to work, there needs to be a centralized server that tracks usage. That means you can only read books when connected to the internet. So if I load up a brand new device with books and go to the Bahamas–sorry! I can’t read them.

This also means that there is a centralized server that knows what books I read, when I read them, and how often I read them and refer to them. That centralized server is in the hands of people who don’t have a great track record with regards to…well, anything. So will they sell my reading list to someone who will use it to glean information about me? You betcha. That information might be handed out to governments–and whether you think the US government would do that, remember this is a global world, and there are more repressive governments out there. How awesome would it be if Amazon let China know how many of its citizens were reading handbooks on organizing or democracy?

You put tracking software on my books over my dead body. The implications that has for control and surveillance of reading are so incredibly chilling.

And yes, I know that Kindles are already tracking this–and I don’t like it.

And what you suggest is still ineffective: you can’t make it so that people can’t read stuff that isn’t tracked, because otherwise people can’t read manuscripts or papers or files from Project Gutenberg any longer. That means that all someone needs to circumvent what you suggest is delete the tracking code, which will take about 5 seconds to figure out, and then you have a perfectly clean file.

End result: savvy users ditch the tracking code, piracy still occurs, and the only people this hurts are regular users.

@Ducky: That’s because Coker is (imho) in the same position as the publishers. IF DRM and proprietary platforms go away, allowing any device to read any file, Smashwords is (almost, see below) redundant.

@Courtney Milan: You’re far more knowledgeable than I, and you could be totally right re tracking. I’m not a libertarian by any means, but I have no love for Big Brother in any form either.

My suggestions (aka admittedly bizarre ideas) were only in terms of trying to find a compromise between DRM and. . . . nothing. As an author, I’d just as soon have SOME protection from wholesale copying, of other people slapping their name on the cover of my book and collecting royalties for it (as happened a few months ago). LIkewise, as a reader, I want to own the books I buy and have the right to keep, share, or recycle them as I see fit, just the way I used to do with dead tree books.

I think what’s happened is that digital publishing in general and digital self publishing in particular have opened up so many avenues to so many people that everything is going to be really messy for a while. For instance, if an “industry standard” emerges, how would self-publishers reach the independent distributors? Right now, with a variety of platforms, Smashwords kind of fills that void. They format to the platforms, distribute to the ebooksellers, and take their cut. An industry standard removes a need for a formater like Smashwords, but do they then become a clearinghouse for self-publishers? Do self-publishers get relegated to second-class citizenship if they can’t pay the co-op fees the big boys can?

If there’s no DRM, and no clearinghouse, does the self-publisher have to get (and pay for) one ISBN for Amazon, another for B&N, another for each of the smaller distributors? Or does the system revert to something basically like what we have now with traditional publishers, who publish only what’s profitable for them and paying the authors a puny 4%, 6%, or maybe a “generous” 8%?

I don’t think there’s an easy answer, because it’s a really complex situation. And I’m sure there are even people who think, “Gee, let’s do away with digital publishing altogether, it’s too messy, I like my paper books better anyway.” I don’t think the syrup will go back in the bottle.

But I’m here to learn, and if I have to learn by askin’ dumb questions, well, Mrs. Quast told us in 5th grade that the only stupid question is the one you don’t ask.

@Edward:Um, shouldn’t that be DRM should be removed. There is no way to sell books to the Kindle readers without DRM.? Or am I not reading it right?

You’re not reading it right. Non-Amazon booksellers can’t sell kindle books *with* DRM because Kindle DRM requires access to Amazon servers. As far as I can tell, the only reason Overdrive lending of Kindle books is possible right now is because it’s done through Amazon’s DRM servers as well.

Linda wrote: What I have a problem with is this absurd system that says B&N will have one set of software and one reader device, AMZ will have another, Kobo and Sony and all the rest will have another, and in order to sell books, an author has to find a way to get her book into all those formats.

Kobo, Sony, and B&N all have the same format (epub). Kobo and Sony have the same DRM (Adobe). B&N has its own DRM, but the nook can also read books authorized with Adobe DRM. I don’t know how submission works to the 3 stores, but I assume the author would only have to produce 1 epub.

I love the traditional publishers and B&N and hate Amazon, but that’s because I love physical books and bookstores. I still read exclusively printed books. Personally, I’m happy with the books and prices from traditional publishers and hope they stick around. Whether it’s true or not the perception I have gotten from Amazon is that they dislike traditional publishers and printed books and therefore I don’t care to give them their money. So I shouldn’t care about ebook prices technically since I don’t buy them, but I worry what Amazon having too much power could do to the books I DO want to buy.

@Linda Hilton:
First, I think it’s important to distinguish between libertarians and civil libertarians, who are not always the same sort of people.

As an author, I’d skip the fees I’d pay for whatever weird DRM and just pocket the difference. I doubt that DRM of any stripe, whether currently in existence, or whether it’s proposed, is worth more than a couple of cents per book in protection, and I’d rather have my couple of cents, thank you.

As a general rule, I spend zero time combating piracy or thinking about it, and I don’t see that it makes a darned bit of difference to my bottom line. I haven’t seen any evidence from anyone that piracy effects a midlist author’s bottom line. As authors, when we propose solutions that inconvenience readers, we need to seriously ask ourselves if it’s worth the money it will save us. Given the absence of evidence that it’ll make a financial difference, I can’t see any justification for it.

The thing that authors have to convince themselves of is that DRM cannot be made unstrippable. It cannot. However many people Adobe or Amazon or Harper Collins sets to working on the problem, there are literally hundreds of thousands of programmers around the world waiting to crack their feeble efforts. And you only need one of them to succeed and write a script to give to the others. You can sink millions of dollars into a DRM scheme and it will last…maybe a few months, if you’re lucky. It is an unwinnable war. (There are a handful of other reasons the war is unwinnable: namely, in order to make the DRM files useful, you have to tell the user’s computer how to read it–and that means the user has access to your DRM scheme for reverse engineering.)

Once DRM has been stripped from a file, it can be put up anywhere–DRM free–for anyone to download.

You have no safety. You never will. It’s not going to happen. Once you load a file with DRM, someone will strip it, put up the clean version, and give users an incentive to get the illegitimate, easy to transfer version, as compared to your wounded version.

The choice an author has is to either accept that gracefully or to make a huge fuss and alienate the people who are burdened by DRM.

The thing that authors have to convince themselves of is that DRM cannot be made unstrippable. It cannot. However many people Adobe or Amazon or Harper Collins sets to working on the problem, there are literally hundreds of thousands of programmers around the world waiting to crack their feeble efforts. And you only need one of them to succeed and write a script to give to the others.

This. Anti-DRM types who think that information should be free not only strip DRM to share product, they share how to strip DRM just as freely. It may not be hundreds of thousands of programmers. All you need is one clever kid with an internet connection. Once the puzzle is solved, everyone who’s interested can find the answer.

The reason I buy DRM’d books now is because it can be stripped. It’s just a PITA. But if you put “social DRM” on books so you can “catch” me stealing/sharing/pirating?! I’d never buy another ebook again even if it could be stripped off just as easily as the current DRM schemes. Kind of how I haven’t bought another Siren ebook since the one I bought had piracy warnings as a footer on every single page. It’s insulting and damned if I’m going to pay for that.

@Courtney Milan: Courtney, I don’t disagree with you about the futility of any sort of DRM, it just isn’t going to stop anyone who is determined to break it. I expect that publishers (and some authors) are going to have to go through the process of implementing social DRM for them to finally and fully understand that it just doesn’t work.

With respect to your comments about people being able to learn what you read, I think that this horse has already left the barn. If you purchase anything online, in store using a credit card, have loyalty points memberships or whatever have you, “they” can or are already tracking everything you buy. You are far smarter than I in these matters, but I’m not sure how much social DRM, if it is embedded in the file by the vendor when the item is purchased and the information is maintained by the vendor, is going to make that much of a difference at this point.

Further, judging by what people put up on their Facebook and other social media sites (or what they send in e-mails from their places of employment), I just don’t think that the majority of the population actually cares (they should but they don’t) about what people know about them. I suspect that is why social DRM is more palatable to people. The current system of DRM requires that we (the customer) do something in order to be able to own our books and read them on any of our devices (and really, how many people actually care about that – if they have a Kindle, they buy from Amazon, a Nook, the buy from B & N etc.). Social DRM is just “there”, and for most people, they just won’t know or care about the implications.

I just want to point out that in the self-publishing workshop I did with Kimberly Killion and Lori Bright at RT last week, I recommended that self-publishing authors NOT use DRM on their files since it doesn’t prevent piracy and merely serves to annoy readers. I saw lots of nodding heads in the audience.

@Linda Hilton: If there’s no DRM, and no clearinghouse, does the self-publisher have to get (and pay for) one ISBN for Amazon, another for B&N, another for each of the smaller distributors?

I just want to point out that ISBNs are totally unrelated to the question of DRM. I use one ISBN for my ebooks in all formats across all distributors/retailers (although Amazon and B&N apply another tracking number to the file in addition to my ISBN). Only if there is a print version of the book do I need two ISBNs. And books with ISBNs don’t have to have DRM. I know because mine has an ISBN and doesn’t have DRM (except to the extent that the retailer/distributor may add it, which I can’t control).

DRM has always made me think the ebook train was being driven by DRM selling conductors. No one outside of the offices choosing to use it finds it anything but an impediment to sales. It has always seemed obvious to me that publishers should have sold in multiple formats directly to readers or taken their cut of their digital price moved along. “Agency” pushed me into buying (less) books exclusively from Amazon, where before Agency I was buying more books exclusively (or almost) from indies. I have a Kindle, where no Kindle was owned before.

Social DRM won’t work. You upload your books to a cloud. Your cloud gets accessed, hacked, whatever. Your files get found and traced back to you. You didn’t seed them or offer them for pirating. Backlash ensues of epic proportions.

Music already did this. It’s really not different, no matter how much noise about it being totally different got made.

I agree that DRM does not prevent piracy but merely hurts the consumer, and that Amazon is taking full advantage of DRM to promote itself and become both a monopoly and monopsony.

I have a question about social DRM in terms of sharing a book between spouses or other family members living under the same roof. Would the document be able to be shared, perhaps not simultaneously, but sequentially by two people with different devices? Therefore, at purchase could two devices be registered?

@Brenda: Social DRM doesn’t have any technological restrictions. A socially DRM’d ebook could be “shared” with a million of your closest friends. What stops the “sharing,” is that the ebook has identifying information in it about you.

It’s not aimed at real pirates because real pirates can strip anything. It’s meant to make people think twice about who they give their ebooks to.

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